Happy Hour

Those who get paid by the hour are more likely to link money and happiness

If you’re feeling unhappy, how your boss pays you may be the problem. A recent study in the Personality and Social Psychology Bulletin by researchers at the University of Toronto and Stanford University reveals that among hourly paid employees, happiness is more strongly linked to income than among those on salary.

“Payment practices influence your psychology,” says Sandford DeVoe, one of researchers and a prof of organizational behaviour and human resources management at U of T. “They influence how you define what happiness means.”

Given that 60 per cent of employees in Canada, the United States and the United Kingdom are paid by the hour, this study suggests that for most people, happiness is directly connected to their income. For those who get an hourly wage and make a lot of money—say more than $100,000 a year, they feel happier. But most hourly earners make a lot less than that, says DeVoe, and their happiness levels are also lower.

Lacking a sense of purpose and satisfaction at work was a common complaint among people who took an online health questionnaire last year, the Q-Gap, which was developed by Scienta Health in Toronto. It was the number one psycho-social problem, and DeVoe’s research indicates that money—and our sense of self-worth at work—may be at the core of those negative feelings.

DeVoe speculates that being paid by the hour continually reminds people about how much their time is worth—every two weeks, for instance, these employees are faced with the fact that they worked X number of hours, and made Y amount of dollars. DeVoe calls this the “commodification of time.” If you’re not making a lot, you’re also getting reminded of how little value you and your time are in the eyes of your employer.

There are other consequences: people who get paid by the hour tend to volunteer less (36 per cent less time than salaried employees, in fact) and log more hours on the job. The thinking goes, “I should spend more time working and earning more money,” explains DeVoe. “Why work without getting paid?”

That’s the rub, he says, because there is plenty of evidence that volunteering actually makes people happier. But hourly wages are a disincentive to doing things for reasons other than money. Getting paid by the hour, say DeVoe, “focuses you on economic dimensions.” That’s at odds with how most of us actually want to pursue our lives, he continues. “Typically we try to think about our lives as having meaning outside of how much we earn. But hourly payment hurts our ability to do that.”

Take this year’s Q-Gap quiz: “How healthy are you?”

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.